Chinese company under investigation for Pyramid Scheme

Beijing police said they are investigating certain members of a Shenzhen-based company suspected of engaging in a pyramid for illegal gathering and disturbing social order.

Beijing police said in a statement on Monday night that certain members of the company, Shanxinhui, were egged on by people with ulterior motives to participate in an illegal gathering on Monday and seriously disturb the capital's social order. Their gathering is suspected of breaking the law.

Zhang Tianming, the company's legal representative, and others have been put under "coercive measures" on suspicion of organizing and leading a pyramid scheme previously.

Police succeeded in persuading participants to disperse and those believed to have led the illegal gathering and refused to obey police orders have been taken away for further investigation, the statement said. "Those who instigate or organize illegal gathering and who participate in such gathering will be punished by law," it said.

The Xinhua News Agency cited the Ministry of Public Security as saying on Friday that police accused Zhang and others of plotting, manipulating and persuading people into taking part in a pyramid scheme disguised as a charity for the poor, and swindled them of huge amounts of money. The ministry said pyramid schemes are often disguised as charities, false currency, e-commerce and WeChat marketing.